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A nice little investigation here at the WSJ. How and why is it that online prices discriminate between different consumers?

It's worth noting, as they do, that there's a difference between discriminating and discrimination. We usually use the latter to mean discriminating against certain groups or people illegally. For example, on the grounds of race or gender. This isn't what is being talked about here at all. Rather, just simple differences in prices being offered based on, well, based on all sorts of things except those legally protected ones like race and or gender.

A Wall Street Journal investigation found that the Staples Inc. website displays different prices to people after estimating their locations. More than that, Staples appeared to consider the person's distance from a rival brick-and-mortar store, either OfficeMax Inc. or Office Depot Inc. If rival stores were within 20 miles or so, Staples.com usually showed a discounted price.

OK, that makes sense. The more choice the consumer has then the more effort you're going to have to put in in order to get their business.

Undoubtedly some are going to complain about this. But I would instead take it as evidence that competition works.

Here we've got the most advanced pricing system that anyone has ever managed to use as yet. And one of its basic assumptions is that the more other places you can get the same thing from then the lower the price it wants to try and charge you. Which is really just a validation of what the economists have been saying for centuries really. The more suppliers of something there are the better the deal that the consumer gets.

Yes, of course, suppliers would love to rip you off if they could. But the way to stop them being able to do so is to ensure that there is plenty of competition. That Staples varies its prices dependent on your distance to an Office Depot is the very argument in favour of allowing the big box stores like WalMart to set up where ever. Competition reduces prices to the consumer and it really is the consumer that this whole economics thing is supposed to be about.